Coles joins Woolies in global top 20

The owners of Australia’s dominant supermarket chains are fighting for supremacy among the world’s largest retailers after Wesfarmers joined rival Woolworths in the world’s top 20.

Coles owner Wesfarmers charged into 18th position from 21st and is growing quicker than Woolworths, which is up one place to 17th, according to the 2013 Global Powers of Retailing Report by accounting firm Deloitte.

The two companies achieved more than $US50 billion ($47.5 billion) each in revenue at home and in New Zealand, compared to others in the top 20 who derived income from stores located in at least 10 countries.

Despite difficult global economic conditions, the world’s largest retailers prospered with more than 80 per cent of the top 250 posting an increase in retail revenue.

Wal-Mart topped the list with revenue of $US446.95 billion, nearly four times that of second-placed French chain Carrefour’s sales of $US113.2 billion.

Aldi, which is a minor power in the Australian market, was ranked eighth with annual sales of $US73.4 billion.

The top 250 retailers grew revenue by 5.1 per cent to $US4.271 trillion in fiscal 2011, building on the previous year’s 5.3 per cent growth.

But Deloitte said the bleak economic environment that Australian retailers have endured for years was likely to continue in 2013.

Local sales growth in 2012 could be attributed to interest rate cuts, carbon tax compensation and other government handouts rather than an improved capacity to spend, it said.

Reasons for a lack of improvement in spending included anaemic jobs growth and a weak labour market, volatile consumer confidence and only moderate real wages growth.

The strongest retail conditions are in mining regions such as Western Australia, Northern Territory and Queensland, but weakest in Victoria, South Australia and Tasmania, Deloitte said.

The arrival of global retailers Zara and Topshop, and the expansion plans of Ikea and Costco was increasing competition, Deloitte Australia partner David White said.

Australian retailers still hold advantages over foreign companies, including a greater knowledge of the local market, but need a well thought out strategy and response to increased competition, he said.

More global brands would head Australia’s way in 2013, with US retail heavyweights Williams Sonoma (Pottery Barn) and Abercrombie & Fitch (Hollister) launching stores in Australia.